Banks are failing to protect customers from transfer scams

Which? says 8% of people admit making a bank transfer that has turned out to be a fraud.

UK banks are failing to adequately protect their customers from the threat of transfer scams, despite being told to step up security to control the issue.

Consumer group Which? said it would contact a number of British lenders demanding an explanation as to why not enough has been done to tackle the problem. Last year, Which? launched a so-called super-complaint, in which it highlighted that victims conned into sending money to a fraudster are not legally entitled to a refund from their banks.

The Payments Systems Regulator (PSR), which received the super-complaint, instructed banks to join forces to work against fraudsters together but it stopped short of accepting a demand from Which? calling for banks to be made liable for losses which have become known as authorised push payment losses.

The PSR defended its decision by suggesting there was not enough evidence available to justify a change in regulation.

However, the consumer group said the measures implemented have not eradicated the problem and people were still losing money, sometimes in vast amounts. A survey it carried out earlier this month showed 8% of respondents had made a bank transfer to a fraudster or knew someone who had. Fifty per cent of those who admitted being scammed said they had done so over the last six months.

"Despite the fact that consumers are still losing life-changing sums of money to fraudsters, it's not clear what meaningful action the banks have taken to protect their customers," said Which? money expert Gareth Shaw.

"Across the industry, and with partners, we are developing new processes to help police intervene when potential victims visit a bank branch, and we are exploring new ways to track stolen funds moved between multiple bank accounts."